CEM REPORT, AGROFOOD | An increase in the sugar price index, along with an upturn in the meat price index led to an increase in global food commodities in April.
The Food and Agriculture Organisation of the United Nations (FAO) revealed that global food prices averaged 127.2 points.
According to the FAO report, this is the first increase in a year up by 0.8 points (0.6 per cent) from March and standing 31.2 points (19.7 per cent) below its value in April 2022l.
“The slight rebound in April was led by a steep increase in the sugar price index, along with an upturn in the meat price index, while the cereals, dairy and vegetable oil price indices continued to drop.”
According to the report, the FAO Sugar Price Index rose for the third consecutive month reaching its highest level since October 2011.
The Sugar Price Index for the review period averaged 149.4 points, up 22.4 points (17.6 per cent) from March.
The report attributed the hike in price to heightened concerns over tighter global availability in the 2022/23 season after further downward revisions to the production forecasts for India and China, along with lower-than-earlier-expected outputs in Thailand and the European Union.
The report added, “Despite the positive outlook for the 2023 sugarcane crops in Brazil, the slow start of the harvest due to above-average rains provided additional support to prices.
“Higher international crude oil prices and the strengthening of the Brazilian real against the United States dollar also contributed to the overall increase in world sugar prices.”
Furthermore, the FAO report detailed that Meat Price Index averaged 114.5 points in April, up 1.5 points (1.3 per cent) from March and standing 7.4 points (6.1 per cent) below its value in the corresponding month last year.
In the review period, pig meat rose the most on increased import purchases by Asian countries and the continued supply limitations in several leading exporters due to high production costs and animal health issues.
Also, poultry meat prices rebounded, following nine months of continuous declines, as import demand increased from Asia, while supply limitations arising from widespread avian influenza outbreaks continued in many regions.
“International bovine meat prices also increased, in response to a decline in cattle supplies for slaughter, especially in the United States of America. Meanwhile, ovine meat prices remained largely stable, as elevated export availability from Oceania nearly matched increased imports by Asian and Middle Eastern countries,” it said.
According to the report, the FAO Dairy Price Index averaged 124.6 points in April, down 2.2 points (1.7 per cent) from March and 22.1 points (15.1 per cent) from its level one year ago.
Additionally, the report states that international prices of milk powders fell for the tenth consecutive month in April.
It added that increased purchases by China and seasonally declining supplies from New Zealand prevented a potentially steeper fall in the world prices of whole milk powder, while increased current supplies from Western Europe exerted further downward pressure on skim milk powder prices.
“Cheese prices also fell, principally reflecting high export availability in Western Europe, where more milk is being channelled into cheese production amid the seasonally rising milk output.
“By contrast, world butter prices remained largely stable, as increased supplies were generally adequate to meet increased import demand for near- and long-term deliveries,” the report said.
Similarly, Vegetable Oil Price Index fell for the fifth consecutive month averaging 130.0 points, down 1.8 points (1.3 per cent) from March.
Following a short-lived rebound in March, international palm oil prices remained virtually unchanged in April.
This was attributed to the downward pressure stemming from a lacklustre import demand from key importing countries was offset by support from comparatively limited supplies of leading producers.
It added that the continued decrease of the price index reflected the combined effect of stable world palm oil prices and lower soy, rapeseed and sunflower oil quotations.
By contrast, it said world soy oil prices continued to decrease, broadly weighed by the seasonal harvest pressure from a potentially record soybean crop in Brazil, despite sharply lower production prospects in Argentina.
Meanwhile, FAO said international prices of rapeseed and sunflower oils also kept falling, chiefly underpinned by lingering abundant global exportable supplies.